Zomato announces its Q4 2024 Quarter Results
KEY HIGHLIGHTS
● Quick commerce business Blinkit turns Adjusted EBITDA positive in March 2024
KEY TAKEAWAYS
● Year-on-year topline growth accelerated to 61% and continues to trend above the stated outlook of 40%+;Growth driven by robust growth in both food delivery and quick commerce
● Bottomline continues to expand and grow with Adjusted EBITDA at INR 194 crore. Margin expansion continues in both food delivery and quick commerce. Quick commerce business gets to Adjusted EBITDA breakeven milestone for the month of March 2024
● Rapid store expansion underway in quick commerce business. Aiming for 1,000 stores by March 20 25
On Shareholder value creation:
● “We could not have imagined the current state of all four of our businesses – food delivery, Blinkit, Going-out and Hyperpure. I think the team has executed phenomenally well over the last couple of years, and continues to stay (more or less) focused with their ears to the ground. Our journey in the last two years has, in so many ways, increased the expectations our stakeholders have from us and we will try our best to live up to them“
– Deepinder Goyal, Founder & CEO, Zomato
On Blinkit’s growth vectors:
● “One of the key vectors for growth for us right now is store expansion. In Q4FY24, we added 75 net new stores taking our total store count to 526. In the current quarter (Q1FY25), we expect to add another 100 stores. At this point, we are aiming to get to 1,000 stores by the end of FY25 .”
– Albinder Dhindsa, Founder & CEO, Blinkit
On profitability
● “On the profitability front, consolidated Adjusted EBITDA was INR 194 crore and improved by INR 369 crore as compared to the same quarter last year. Quick commerce business turned Adjusted EBITDA profitable in the month of March and Hyperpure losses also reduced meaningfully.”
– Akshant Goyal, CFO, Zomato
On ESG
● “Our progress on the ESG front last year resulted in our ESG rating improving from ‘medium risk’ to ‘low risk’ by one of the leading global agencies – Sustainalytics. We are proud to share that we now have the best ESG rating amongst major global food delivery companies across the world.We hope to continue to improve this rating with progress on our ambitious Net Zero goal to achieve net zero emissions across our food delivery value chain by 2033.” – Deepinder Goyal, Founder & CEO, Zomato our delivery partners.”
–Deepinder Goyal, Founder & CEO, Zomato
Quick commerce (Blinkit)
- Quick commerce GOV grew 97% YoY
- Growth driven by store expansion:
○ 75 net new stores added in Q4FY24, taking the total store count to 526. This is more than the number of stores added in the three preceding quarters cumulatively. ○ 100 more stores expected to be added in the current quarter (Q1FY25); Aiming to get to 1,000 store by the end of FY25
- Profitability
○ Blinkit turns Adjusted EBITDA positive in the month of March 2024
○ In steady state, 4-5% Adjusted EBITDA margin (as a % of GOV) expected in this business.
“In addition to scaling up the existing store network and use cases, we will be adding more use cases so the Blinkit platform is even more useful in the everyday lives of our customers. We plan to stick to making our service even more reliable and loved for our customers. And just like today, we will strive to maintain an edge over competition for the quality and innovation that we stand for.”
– Albinder Dhindsa, Founder & CEO, Blinkit
ESG
- Progress on the ESG front last year resulted in ESG rating improving from ‘medium risk’ to ‘low risk’ by one of the leading global agencies – Sustainalytics.
- Zomato now has the best ESG rating amongst major global food delivery companies across the world.
- 20,000+ delivery partners across cities trained to perform first-aid and CPR in case of any on-road casualties as part of the ‘first-responder training program’ launched last quarter
○ Delivery partners are voluntarily registering for this training program as they understand the importance of timely first-aid which can make all the difference in saving a life
- Zomato has been building a proprietary network of 650+ on-ground weather stations (largest private infrastructure of this kind in the country in our view) that provides precise and real-time data on key weather parameters such as temperature, wind speed, rainfall, etc. This network was created by Zomato to help in making the right business decisions
and serve customers better. As a Zomato Giveback, this data is now freely accessible to anyone who wishes to leverage it, through an API available on weatherunion.com.
“We hope to continue to maintain this rating with progress on our ambitious Net Zero goal to achieve net zero emissions across our food delivery value chain by 2033.”
– Deepinder Goyal, Founder & CEO, Zomato
Hyperpure
- Revenue grew by 99% YoY | Losses reduced meaningfully
Going-Out
- GOV grew 207% YoY
On the proposal to create a new ESOP pool
- Proposal to create an additional ESOP pool of 2% of our outstanding share capital on a fully diluted basis, subject to shareholders’ approval
“ESOPs are important to help build a culture of long-term thinking and innovation and create a ‘founder mindset’ amongst senior employees, which ultimately drives the right outcomes for long term shareholder value creation. Also, in people-dependent businesses like ours, where great execution and constant innovation are the only determinants of survival, ESOPs are a great way to drive the high-performance culture that we thrive on.”
– Akshant Goyal, CFO, Zomato
QUOTE BANK FROM Q4FY24
On way forward
“Our internal name for our organisation (Zomato + Blinkit + Hyperpure + Going-Out) is called Eternal. But, Eternal can never be the state of an organisation, because, the moment you think that an organisation is going to last forever, that’s the day it starts dying.”
– Deepinder Goyal, Founder & CEO, Zomato
On the organization
“I believe the key to building an organisation which lasts is to not aim for size (and let it be a by product), but to aim for survival. As Simon Sinek said in his book “The Infinite Game” – all you should strive for is to stay in the game, and you have to stay in the game for long enough to win”.
– Deepinder Goyal, Founder & CEO, Zomato
On growth in food delivery
“I think customers value the convenience and predictability layer Zomato has built on top of the services offered by restaurants, which is why the growth of Zomato is a tad bit higher than that of the restaurant industry.”
– Deepinder Goyal, Founder & CEO, Zomato
On Blinkit’s growth
“Our investments (intellectual and financial) in the business are over-indexed to making our service more and more reliable. Reliability means a) availability of products at all times and b) quick and predictable delivery times. We believe that a business built on the back of great service quality is much tougher (and hence more defensible) than just offering lower prices .”
– Albinder Dhindsa, Founder & CEO, Blinkit
On store expansion
“While we have a presence in 26 cities, the focus from an expansion standpoint is the top eight cities in India. The job for us over the next few quarters is to get Bengaluru and other large cities like Mumbai and Hyderabad to the penetration of Delhi NCR, both in terms of store footprint and GOV. This alone will lead to ~4x increase in our GOV.”
– Albinder Dhindsa, Founder & CEO, Blinkit
On success witnessed across cities
“We believe that a business built on the back of great service quality is much tougher (and hence more defensible) than just offering lower prices. In March 2024, our average delivery time was 12.5 minutes. Besides delivering quickly, ~75% of our orders were delivered within two minutes of the promised time we showed to our customers and our accuracy on fulfilling items to customers was 99%+. This meant our service was fast, reliable and stood up to the promise we made to our customers.”
– Albinder Dhindsa, Founder & CEO, Blinkit
How Ad Ops is Revolutionizing the Indian Advertising Landscape
Welcome to the world of ad operations, where advertising and optimization meet chaos and order, respectively. Ad operations are the foundation of the monetization strategy in the realm of digital marketing. Its function is basic. Make sure the publishers serve the right advertising at the right times. The management and optimization of digital advertising initiatives fall under this category. Ad operations have changed significantly over time. According to a 2022 forecast, revenue for ad media owners will increase by around 6% globally to a record-breaking $865 billion in 2023. As the decade progresses, it is predicted that the annual sum will rise even higher, hitting one trillion dollars by 2026.
Ad Ops is a crucial part of any publisher’s system. It is in charge of overseeing internet sales of digital advertisements and is the most profitable cash cow. In essence, it is a crucial element of ad tech. But what precisely are Ad Ops?
An Introduction to Ad Operations
Ad Ops, often referred to as Digital Ad Operations, is the term used to describe the systems and procedures that enable the management and delivery of digital advertisements. The term refers to any method used by a marketing team to manage, carry out, or improve advertising campaigns. Although there are more than a billion websites, it would be extremely expensive for advertisers to have their adverts seen by everyone around the globe. Instead, companies can attempt to target their ads at individuals who most closely match their existing customers using digital advertising markets. Here’s where ad ops come in.
They are in charge of placing the ads based on the likely audience, time zones, places, and regions. It will generate income in return through advertising initiatives. Ad operations technology links advertisers looking to buy ad space with websites that offer ad space for sale. Despite the fact that the majority of digital ad spaces are sold programmatically and without human intervention, ad operations play a significant role in setting up and overseeing these procedures.
Key Components
Ad operations is the fusion of many technological methods, tools, and stakeholders. The main categories in which the key elements of ad operations fall are:
- Ad trafficking
- Creating and managing ads
- Delivering and targeting ads
Ad Trafficking
Ad Trafficking means setting up and implementing an advertisement campaign so it runs in line with its goals.
- Scheduling – One of the crucial tasks for Ad Ops is to correctly decide and operate pre-fixed schedules for launching and running ads considering the timing of an ad is a key.
- Optimization – One of the most important benefits of digital advertising is the ability to get precise, real-time data on consumer behavior and advertising engagement.
Creating and Managing Ads
Involves choosing ad formats, developing ads, and managing marketing campaigns. To guarantee that ads are properly created and handled, ad ops specialists collaborate closely with advertisers and publishers.
Delivering and targeting ads
Professionals in ad operations employ a variety of targeting strategies, including behavioral and demographic targeting.
- Ad Performance Analytics – To optimize ad campaigns and boost performance, Ad Ops specialists track and analyze data on ad performance.
- Privacy and Ad Compliance – Ad Ops experts must make sure that ads are delivered in a way that respects user privacy and adheres to applicable laws.’
Read More: 10 Game-Changing AI Tools for Digital Marketing in 2023
Advertising Landscape in India
With cutting-edge digital technology becoming more popular than ever in the market, the Indian advertising sector is set to reach new heights. Due to the pandemic, the advertising industry has been struggling to survive the past two years. However, indications show that the Indian advertising sector has been progressively recovering. The market size was INR 743 billion in 2022, and by 2028, it is anticipated to be INR 1,412.5 billion. It has a growth rate of 11%. The Indian advertising industry is expanding at an unprecedented rate, and digital advertising is flourishing. In an effort to reach the target demographic, brands and advertisers are using agile strategies to use digital advertising.
With every second that goes by, the Indian advertising scene continues to grow. Advertising experts adopted a 360-degree strategy as technology improved to include existing and upcoming digital media. Advertising in India, a now-vast industry, is set on being the second-fastest growing advertising market in Asia. It is now more data-driven, with thorough client journeys, mass-customized messages, and attractive deals.
Benefits and Drawbacks of the Ad Ops in the Advertising Landscape
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Case Study for Brands Who Leveraged Ad Ops
In India, Zomato is a well-known B2P app for food delivery. Zomato’s excellent marketing campaign has been one of the primary causes of this enormous increase in revenue. It has made it a priority to connect with its target market consistently. Zomato grew when internet marketing became mainstream in India. For instance, appealing ad words on billboards and SMS messages to the target population showed a firm belief in their advertising skills.
Here are some ways that Zomato’s marketing and ad operations techniques contributed to the app’s success.
- Wide-range and Powerful Outreach
- Email Tactics
- Using Social Media
- SEO Efficiency
Wide-range and Powerful Outreach
Zomato used a variety of outreach strategies in its marketing initiatives. It involves paid advertisements, email and SMS lists, and social media strategy. They studied consumer traits, ordering trends, and peak ordering hours to tailor ads for Zomato’s user base.
Email Tactics
Zomato targeted a potential niche by curating its emails to implement marketing strategies centered on the binge-watching culture that goes hand in hand with food.
Using Social Media
Zomato depicts itself on social media with postings that are engaging on an emotional level. They interact in regional languages and make humorous memes to participate in meme
SEO Efficiency
Zomato has produced extremely keyword-dense material that has drawn more than 67 lakh internet visitors.
Zomato has a lot of influence because of its unique strategy of putting novel concepts into action on various fronts. It has always been a top priority for them to pay heed to customer comments and answer as soon as feasible.
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Myntra, a top-tier Indian online apparel retailer, boasts a remarkable “rags-to-riches” journey. Renowned for quality products and stellar customer service, its marketing plan revolves around key pillars for success.
- Content Marketing
- Social Media Marketing
- SEO Efficiency
- Paid Advertising
Content Marketing
Myntra has a popular blog that discusses a wide range of fashion, lifestyle, and trend-related topics. This makes the site one of the most well-liked fashion blogs in India. It leverages content marketing to establish connections with other brands and influencers.
Social media marketing
Myntra keeps a strong social media presence to ensure its target audience is always aware of the latest content. It routinely undertakes social media campaigns that support the development of the brand’s feeling of community. Additionally, it assists in providing a supply of user-generated material for advertising needs.
SEO Efficiency
Myntra makes use of SEO to make sure that its website ranks as highly as possible for the right keywords. To do this, they incorporate relevant keywords and phrases into the website text.
Paid Advertising
Myntra promotes its website and goods through paid advertising. They employ a variety of strategies, such as display, retargeting, and pay-per-click (PPC) advertising. These techniques enable Myntra to efficiently promote its brand to a large audience.
Both businesses saw enormous success as a result of their marketing plans and ad operations. These businesses would still be unknown if they had not reached their target audiences at the correct time and through the right channels. Zomato and Myntra needed to avoid bombarding customers with frequent and unnecessary ads to provide an excellent customer experience. They were aware of the demographics and preferences of their audience. Both businesses achieved the ideal mix between client satisfaction and revenue generation. The organizations were able to make informed decisions due to their comprehensive insights.
The Future of Ad Ops in India
Ad operations teams will need to embrace newer platforms and follow the lead of younger demographics as the Indian advertising market continues to grow. Digital-out-of-home (DOOH) advertising tools are among the new technologies that enable marketers to reach audiences in public spaces with customized content. Moreover, it’s clear that ad operations are no longer only a tactical role. Ad operations teams are already becoming more strategic, leveraging technology to solve business challenges and playing a key role in revenue growth because of their close relationship to revenue. However since digital media is always changing, ad operations professionals should expect to face a number of new difficulties in the coming years.
- The volume of campaigns will keep growing at an exponential rate.
- The range of available ad formats will increase.
- Utilizing first-party data effectively will be essential—even more so than it is now.
- Changes in policy will be implemented on a worldwide, regional, and national scale.
- There will be more pressure on companies to maintain high margins while increasing revenue.
- Publishers will see that ad ops teams with a tech focus can directly affect revenue.
- Ad ops teams’ increased awareness of revenue workflows and data will help them move closer to the strategic side of the business.
Another important factor in digital marketing will be the development of technology. Fortunately, generative AI has made it simpler for ad operations teams to create more content in greater quantities intended for multiple channels. This technology can be used by ad operations specialists to test ad tech platforms, generate and evaluate audience segments, and produce content in a variety of formats. Ad operations teams can concentrate more on gathering information and using data-driven insights to guide marketing and revenue decisions as generative AI enhances automation.
Final Words
Ad Ops is increasingly playing a crucial role in the Indian advertising sector by enhancing efficiency, targeting, and campaign effectiveness. In this industry, automation and personalization must be carefully balanced. Ad operations will be essential in ensuring ad viewability and brand safety as the advertising landscape changes. Cheers to the growth of ad operations and their bright future in the Indian advertising industry.
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